There’s some good news for the industry of North-East as the union commerce ministry has agreed to have a relook into its March 2008 notification which had considerably restricted excise duty exemption of industrial units in the region. It is learnt that union commerce minister Kamal Nath had recently “assured” the Assam chief minister, Tarun Gogoi, to look into the issue.

Nath, said sources, had “agreed on the issue,” and assured Gogoi to try and exempt excise duty of North-East’s industries. The centre, through a notification on March 27, 2008, had withdrawn the total exemption of excise duty paid from the personal ledger account (PLA) and allowed exemption only up to 56 per cent of total excise duty paid from PLA on medicines, cosmetics and toiletries. The rates vary from industry to industry. The industry of the region had been demanding roll-back of the notification since then as it became difficult for them to arrive at more value additions.

The excise duty benefit, along with other such concessions, was announced under the North-East Industrial and Investment Promotion Policy (NEIIPP), 2007, by the centre. The industry of the region demands that benefits announced under NEIIPP should remain in effect till the expiry of the policy, and should not be tinkered with halfway, as investments had been made accordingly by them.

Moreover, many local entrepreneurs had to shelve new investment plans as the excise duty refund restriction increased their cost of production. Hard hit are the local manufacturers who manufacture mainly FMCG goods, for various big companies. Since MRP of goods have remained unchanged, local manufacturers now find it less cost effective to manufacture such goods for big companies as the cost of production has increased with the restriction in excise refund.

As per a preliminary study by Federation of Industry and Commerce of North Eastern Region (FINER), the premier trade and industry body of North-East, the upcoming Rs 5,460-crore Assam Gas Cracker Project and the downstream industries associated with it would bear the brunt of increased cost of production due to excise refund restriction.